SYMBOLS AND DEFINITIONS FOR BOND, COMMERCIAL PAPER and OTHER DEBT ISSUES

SHORT-TERM ISSUANCES

LONG-TERM ISSUANCES

PRS 1 (Best Grade) : Strongest capability for timely payment

of debt instrument issue on both interest and principal.

PRS Aaa : Obligations rated PRS Aaa are of the highest

quality with minimal credit risk. The obligors capacity to meet
its financial commitment on the obligation is extremely strong.
PRS Aaa is the highest rating assigned by PhilRatings.

Repayment capacity will normally be evidenced by the

following characteristics:
Leading market positions in well established industries;
High rates of return on funds employed;

Conservative capitalization structures with moderate

reliance on debt and ample asset protection;
Broad margins in earnings coverage of fixed financial
charges and high internal cash generation;
Well-established access to a range of financial markets
and assured sources of alternative liquidity.
PRS 2 (Better Grade) : Above average (strong) capability for
payment of commercial paper issue for both interest and
principal. This is normally evidenced by many characteristics
of a PRS 1 rating but to a lesser degree. Earning trends and
coverage ratios, while sound, will be more subject to
variations.
Capitalization
characteristics,
while
still
appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
PRS 3 (Good Grade) : Satisfactory capability for payment of
debt instrument issue on both interest and principal.
The effect of industry characteristics and market composition
may be more pronounced. Variability in earnings and
profitability may result in changes in the level of debt
protection measurements and in the requirement of relatively
high financial leverage. Adequate alternate liquidity is
maintained.
PRS 4 : Minimal assurance for timely payment of debt
instrument issue on both interest and principal. Susceptible
to near term adverse change due to less favorable financial
or economic condition.
PRS 5 : Capability to pay interest or principal of debt
instrument issue is very doubtful.
PRS 6 : Payment of interest or principal of debt instrument
issue is in default.

NOTE: PhilRatings can also include a plus (+) or a (-) sign

to further qualify the above ratings.
A PRS 1 minus rating is not equivalent to a rating of PRS 2
plus.

PRS Aa : Obligations rated PRS Aa are of high quality and

are subject to very low credit risk. The obligors capacity to
meet its financial commitment on the obligation is very strong.
PRS A : With favorable investment attributes and are
considered as upper-medium grade obligations. Although
obligations rated PRS A are somewhat more susceptible to
the adverse effects of changes in economic conditions, the
obligors capacity to meet its financial commitments on the
obligation is still strong.
PRS Baa : An obligation rated PRS Baa exhibits adequate
protection parameters. However, adverse economic conditions
and changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial
commitment on the obligation. PRS Baa-rated issues may
possess certain speculative characteristics.
PRS Ba : An obligation rated PRS Ba is less vulnerable to
nonpayment than other speculative issues. However, it faces
major ongoing uncertainties relating to business, financial or
economic conditions, which could lead to the obligors
inadequate capacity to meet its financial commitment on the
obligation.
PRS B : An obligation rated PRS B is more vulnerable to
nonpayment than obligations rated PRS Ba, but the obligor
currently has the capacity to meet its financial commitment on
the obligation. Adverse economic conditions will likely impair
the obligors capacity to meet its financial commitment on the
obligation. The issue is characterized by high credit risk.
PRS Caa : An obligation rated PRS Caa is presently
vulnerable to nonpayment and is dependent upon favorable
business, financial and economic conditions for the obligor to
meet its financial commitments on the obligation. In the event
of adverse economic conditions, the obligor is not likely to
have the capacity to meet its financial commitment on the
obligation. The issue is considered to be of poor standing and
is subject to very high credit risk
PRS Ca : An obligation rated PRS Ca is presently highly
vulnerable to nonpayment. Likely already in or very near
default with some prospect for partial recovery of principal or
interest.
PRS C : An obligation is already in default with very little
prospect for any recovery of principal or interest. PRS C is the
lowest rating assigned by PhilRatings.
(January 29, 2009)